Opening Bell: 06.01.11

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S.E.C. Case Stands Out Because It Stands Alone (NYT)
But [Fabrice] Tourre’s world would soon be turned upside down. In fall 2009, the S.E.C. issued him a Wells notice, a formal warning that he was likely to be named in a civil fraud suit for his role in the mortgage deals. Mr. Egol also received such a notice in 2010. In their Oct. 10 response to the S.E.C., Mr. Tourre’s lawyers, including Pamela Chepiga of Allen & Overy, made an argument that they have not emphasized publicly. They contended that “singling Mr. Tourre out for criticism regarding the content of this clearly collaborative effort is unreasonable.” These legal replies, which are not public, were provided to The New York Times by Nancy Cohen, an artist and filmmaker in New York also known as Nancy Koan, who says she found the materials in a laptop she had been given by a friend in 2006. The friend told her he had happened upon the laptop discarded in a garbage area in a downtown apartment building. E-mail messages for Mr. Tourre continued streaming into the device, but Ms. Cohen said she had ignored them until she heard Mr. Tourre’s name in news reports about the S.E.C. case. She then provided the material to The Times. Mr. Tourre’s lawyer did not respond to an inquiry for comment.

Did the NYT hack Fabrice Tourre’s email? (Reuters)
Felix Salmon: "Louise Story and Gretchen Morgenson have a long and rambling story about the court case against Goldman’s Fabrice Tourre, which is mainly interesting for how it was sourced...I’m sure this was extremely carefully formulated, but it does raise a lot of questions without answering them. Tourre’s name was splashed over the newspapers in April 2010, so it stands to reason that the NYT has had some kind of access to Tourre’s private, password-protected email account — not to mention archives going back at least to 2006 — for a good year at this point. I’d also guess that the NYT is going public with its source now because Tourre finally got around to changing his password, and the stream of emails then dried up."

SAC Faces Probe of Biotech Trading (WSJ)
MedImmune shares jumped 18% on April 23, 2007, the day its takeover was announced. Trading was heavy before the announcement, driving shares up more than 50% over six weeks, suggesting that rumors of a deal may have reached traders ahead of the announcement. SAC significantly increased its holdings of MedImmune during the quarter prior to the one in which the deal was announced, according to public filings. SAC increased its holdings from 151,000 shares in the fourth quarter of 2006 to 796,000 shares in first quarter of 2007. It cut its holdings to 30,000 shares at the end of 2007's second quarter, then reported that it sold the position completely, according to filings.

Greece nears IMF/EU deal, dismisses drachma talk (Reuters)
Greece should complete talks by the end of the week with inspectors from the EU and IMF on a medium-term budget plan plus a vital next slice of international aid, sources close to the negotiations said on Wednesday.

EU warns US to speed up bank reform (FT)
In a letter sent last week to US Treasury secretary Tim Geithner, Michel Barnier, the European commissioner in charge of financial markets, argued that Brussels was ahead of the US in several areas – including capital requirements for banks and limits on bonuses for financial executives. Mr Barnier urged the US to match European efforts. “The level playing field must be a reality, not an empty slogan,” he wrote in the May 27 letter, which was obtained by the Financial Times.

Irish lenders outline loss plans for bondholders (FT)
Three of Ireland’s lenders revealed plans to impose losses of up to 90 per cent on bondholders in attempts to make them shoulder some of the cost of recapitalising the country’s banks. Bank of Ireland said it would shortly announce a cash offer for €2.6bn ($3.7bn) of its subordinated debt, with discounts of either 80 per cent or 90 per cent depending on the type of bond. Two smaller lenders, Irish Life & Permanent and EBS, planned to impose similar losses on holders of about €1bn of debt.

UBS May Move Stamford Investment Bank to World Trade Center (Businessweek)
UBS AG, Switzerland’s biggest lender, may move the staff of its U.S. investment bank from Stamford, Connecticut, to the World Trade Center in Manhattan by 2015, a person with direct knowledge of the plan said.

Attorney General orders more episodes of the “The Wire”, or a movie (Reuters)
“I want to speak directly to Mr. Burns and Mr. Simon: Do another season of ‘The Wire’,” Holder said, drawing laughter and applause from the audience. “That’s actually at a minimum. … If you don’t do a season, do a movie. We’ve done HBO movies, this is a series that deserves a movie. I want another season or I want a movie. I have a lot of power Mr. Burns and Mr. Simon.”

‘Expert Networker’ Jiau Faces Trial in U.S. Insider-Trading Investigation (Bloomberg)
Winifred Jiau, a former consultant with so-called expert networking firm Primary Global Research LLC, faces jury selection as her insider trading trial begins today, the third tied to a nationwide probe of illegal stock- tipping.

Citigroup Close to China Securities Partnership Deal (WSJ)
Citigroup Inc. is close to an agreement with a partner in China to set up a joint-venture securities business that would give the New York bank a long-sought foothold in China's domestic capital markets, according to people familiar with the situation. Citigroup is expected to sign a memorandum of understanding with Shanghai-based Orient Securities Company Ltd. as soon as Thursday morning China time.

EIB halts Glencore lending on governance concerns (Reuters)
The EIB, the European Union's lending institution, provided in 2005 a $50 million loan to Mopani Copper Mines, a Zambian subsidiary of Swiss-based Glencore, to help pay for the modernisation of a copper smelter. But Mopani has since been accused by some non-governmental organisations -- most recently by campaign groups in an open letter signed by a group of European parliamentarians -- of tax evasion and of causing widespread pollution.

Morgan Stanley Invests in Short-Sale Target Yongye International of China (Bloomberg)
Morgan Stanley agreed to invest $50 million in Yongye International Inc. (YONG), the U.S.-traded producer of plant nutrients in China that is the target of a short seller who says the company has misrepresented its business.

South Korea Probes Foreign Banks (WSJ)
Financial Supervisory Service Deputy Gov. Kim Yung-dae said at a briefing Tuesday that some foreign-bank branches in South Korea were handing over day-to-day trading operations involving money held in local accounts to a larger foreign branch or regional headquarters in places like Hong Kong and Singapore. Such outsourcing is illegal in South Korea…Mr. Kim said HSBC Holdings PLC and Crédit Agricole SA have already been sanctioned for improper outsourcing of operations involving derivatives…A person familiar with the situation said Royal Bank of Scotland Group PLC may also be sanctioned for engaging in similar activity, with the FSS likely to decide on the matter in June or July.

Sovereign ratings still relevant – but mostly when they go negative (FT Alphaville)
Bond markets still react to sovereign ratings announcements, though they tend to react more when the rating agencies say something negative. That’s the conclusion of a new working paper from the European Central Bank, which looked at changes in yields and CDS spreads after rating actions from Standard & Poor’s, Moody’s and Fitch on two dozen European Union countries from 1995 on.

Lehman Veteran Is Back in Game (WSJ)
Mark Walsh is best known for the gigantic real-estate deals that backfired on Lehman Brothers Holdings Inc. before it collapsed in 2008. As the financial crisis recedes, the 52-year-old Mr. Walsh is mounting a low-key comeback at a new real-estate firm by leaning on connections made before the real-estate bubble burst. "Unfortunately, Mark has to live with the talk of having done a couple of bad deals, rather than people focusing on the overwhelming amount of good ones," says New York real-estate developer Steven Witkoff.

Accuser was maid to wait (NYP)
A female manager at the ritzy Pierre hotel was suspended yesterday for shrugging off a room attendant who reported that an Egyptian business big shot had just sexually assaulted her in his room, the hotel revealed yesterday. The manager, whose name was not released, merely noted the maid's shocking claims in a logbook -- and never reported them to Pierre security, her own bosses or police, officials said.

Sarah Palin, Donald Trump split a pepperoni pizza at Famous Famiglia in Times Square (NYDN)
"She didn't ask me (to run with her) but I'll tell you, she's a terrific woman," Trump said as he ushered Palin into a branch of Famous Famiglia pizza on Broadway at 50th St.

ACLU wants porn to be allowed for South Carolina inmates (ABC)
The American Civil Liberties Union is pushing for porn at a detention center in Moncks Corner, South Carolina. The move came after reports surfaced that the facility only allowed inmates to read the Bible. But prison officials said that isn't true and inmates have a wide variety of reading material at their disposal.

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